SEOUL: As Japan slips into recession, South Korea is keeping an increasingly wary eye on its export rival’s free-falling currency, which is honing a lasting competitive edge over Korean products in a number of key markets.

The massive fiscal stimulus and flood of easy money unleashed by “Abenomics” has sent the Japanese yen plunging to multi-year lows against a basket of major currencies.

In the past two years, the yen has lost around 33 percent of its value against the US dollar and 35 percent against the Korean won — a depreciation that has triggered public expressions of concern in Seoul from industrialists, politicians and monetary policy-setters.

A weaker yen makes Japanese exports cheaper, which impacts countries such as South Korea that are direct competitors in a number of key sectors.

Bank of Korea (BOK) governor Lee Ju-Yeol promised earlier this month that it would not “sit idle” despite the limited tools it can deploy to counter the falling yen.